Refer to the World View to answer two questions.WORLD VIEWTrump Tariffs Shave U.S. GrowthDeclaring himself to be a "tarif man," President Trump imposed a series ofescalating tariffs on Chinese goods The tariff war started in early 2018 with a 25percent tant on 818 Chinese products and morphed into 10-25 percent taritfs onvirtually all Chinese exports in late 2010. Economists estimate that the tarffsincreased US prices by 1 percent and shaved 0 26 percent off GDP growth in2019Source Media and research reports, December 2019Instructions: Round your responses to one decimal place.If GDP grew by $831 billion in 2019.a. how much potential output was lost as a result of the Trump tariffs?%4.billionb. If a new house costs $170,000 to construct, how many houses could have been produced with that potential output?houses

Tariff tax Tariff tax is imposed by the domestic government on the imports of goods at the border.…

Refer to the World View to answer two questions, WORLD VIEW Trump Tariffs Shave U.S. Growth Declaring himself to be a tarif man," President Trump imposed a senes of escalating tarifs on Chinese goods The tariff war started in early 2018 with a 25 percent tartt on 818 Chinese products and morphed into 10-25 percent tarits on virtually all Chinese exports in late 2010. Economists estimate that the tarffs increased US pnces by 1 percent and shaved 0 26 percent off GDP growth in 2019 Source Media and research reports, December 2019 Instructions: Round your responses to one decimal place. If GDP grew by $831 billion in 2019. a. how much potential output was lost as a result of the Trump tariffs? billion b. If a new house costs $170,000 to construct, how many houses could have been produced with that potential output? houses

Refer to the World View to answer two questions, WORLD VIEW Trump Tariffs Shave U.S. Growth Declaring himself to be a tarif man," President Trump imposed a senes of escalating tarifs on Chinese goods The tariff war started in early 2018 with a 25 percent tartt on 818 Chinese products and morphed into 10-25 percent tarits on virtually all Chinese exports in late 2010. Economists estimate that the tarffs increased US pnces by 1 percent and shaved 0 26 percent off GDP growth in 2019 Source Media and research reports, December 2019 Instructions: Round your responses to one decimal place. If GDP grew by $831 billion in 2019. a. how much potential output was lost as a result of the Trump tariffs? billion b. If a new house costs $170,000 to construct, how many houses could have been produced with that potential output? houses

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter18: International Trade And Comparative Advantage

Section: Chapter Questions

Problem 2TY

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Brazil is one of the world’s largest exporters of beef and China is a major purchaser of that beef (an estimated 30% of China’s beef imports in 2016 came from Brazil). However, in March 2017, China, South Korea, the European Union, and Chile suspended imports of meat products from Brazil as a precautionary measure in response toallegations that meat inspectors and politicians had received bribes to overlook improper meat packing practices and allow sales of tainted food. How would the closing of export markets for a country’s beef products together with a fall in domestic sales of beef products and an increase in the domestic equilibrium quantity be reflected in supply-anddemand diagrams of that country’s foreign and domestic markets for beef in the short run?
Pat and Chris can spend their nonleisure time working either in the marketplace or at home (preparing dinner, taking care of children, doing repairs). In the marketplace, Pat earns a higher wage, wp= $20, than Chris, wc= $10. a. Show their combined budget constraint and identify who has the comparative in working in the marketplace and who has a comparative advantage in working at home. b. Discuss how living together can affect how much each of them works in the marketplace. Can you think of a shock that would significantly affect their choices? Briefly explain the shock and its effects. Illustrate your answer with a numerical example different from the textbook solution.
Two countries, Korea and Vietnam, are engaging in international trade.They produce two goods: automobiles and cloth. We observe a relativeabundance of cheap labor in Vietnam and a relative abundance of capitalin South Korea. a. Assume that automobiles are capital-intensive and cloth are cheaplabor-intensive. Using the Hecksher-Ohlin theory, explain what willhappen in trade between these two countries, in terms of export andimport. c. Draw a graph that shows the above situation in South Korean economy with a P P F and two relative prices (one before trade and theother after trade). The quantity of automobiles (QAuto) is on thehorizontal axis and the quantity of cloth (QCloth) is on the verticalaxis.
In che mid-1980s several of South Africa's maintrading partners imposed trade sanctions on SouthAfrica in an effort to bring an end to the then-prevailing policy of apartheid.South Africa mainly relied on the exports ofprimary commodities like gold, iron and other preciousmetals, while importing mainly capital goods.This almost instantly led to South Africa expe-riencing a shortage of capital goods, resulting insubdued economic growth. 31. In what did South Africa have a comparativeadvantage? 32.a.Draw a graph to illustrate production,consumption and trade in South Africabefore the imposition of trade sanctions.b.Was South Africa consuming inside, on oroutside its PPP? Explian your answer.c.Draw a graph to show the effects of tradesanctions on consumption and productionin South Africa.d. Did trade sanctrions change any opportunitycoSts in South Africa? If so, did theopportunity cost of everything increase?Did the opportunity cost of any itemsdecrease? Illustrate your answer…
Production Advantage and Opportunity CostsAssume there are two countries, the United States and France, and two goods, automobiles andcomputers.The table presented below shows the number of automobiles and computers that the United States andFrance can produce with the same amount of resources.United States FranceAutomobiles 120 100Computers 60 55Source: Pearson Education Inc. 1.1 Which country has an absolute advantage in computer production? Motivate your answer.1.2 Which country has a comparative advantage in the production of automobiles? Motivateyour answer. 1.3 Assume these countries trade with one another under the conditions of free trade. Whichcountry will specialise in the production of automobiles? Motivate your answer. 1.4 If free trade exists between the United States and France, what are the highest and lowestlevels for the price of an automobile (expressed in terms of computers)? Motivate youranswer by stating which level favours the United States and France.
Sometimes the exports of developing nations are concentrated in only one or a few primary products. For example, according to World Bank data, coffee constitutes almost 90% of Burundi’s total exports. Therefore, changes in demand or supply of coffee can have significant effects on the health of Burundi’s economy. The current world price of coffee is $5.00 per pound, but there is uncertainty about the shape of the demand and supply curves. The following graphs (scenario A and scenario B) show two possibilities for demand and supply in the market for coffee. Suppose that favorable growing conditions cause an increase in the global supply of coffee. On the following graph, shift the demand or supply curve of scenario A to show what happens in the market for coffee as a result of this event. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it…
scenario Production Advantage and Opportunity CostsAssume there are two countries, the United States and France, and two goods, automobiles andcomputers.The table presented below shows the number of automobiles and computers that the United States andFrance can produce with the same amount of resources.United States FranceAutomobiles 120 100Computers 60 55Source: Pearson Education Inc. 1.1 Which country has an absolute advantage in computer production? Motivate your answer.1.2 Which country has a comparative advantage in the production of automobiles? Motivateyour answer. 1.3 Assume these countries trade with one another under the conditions of free trade. Whichcountry will specialise in the production of automobiles? Motivate your answer. 1.4 If free trade exists between the United States and France, what are the highest and lowestlevels for the price of an automobile (expressed in terms of computers)? Motivate youranswer by stating which level favours the United States and France.
pics is just for reference i need Q20 solution Question 20 Refer to Table 1-1 in Question 11 and your answers to questions 11-18. (Same scenario as Q 19) Assume that Derryland and Whetonia each has 40 labor hours available and that there is no trade. Each country consumes what it produces. Assume now that, without trade, Derryland spent 28 hours producing cheese and the remaining 12 hours producing bread. Whetonia spent 20 hours producing cheese and 20 hours producing bread. What is the total output of BREAD produced by both countries combined?
In mixed specific factors model, clothes and rice, capital is specific to clothes and land is specific to rice. When the goverment imposes a tariff on the imports of rice, who will benefit? Explain the answer using a diagram.
Are the following statemen ts true or false? Explain ineach case.a. ''1Wo countries can achieve gains from trade evenif one of the countries has an absolute advantagein the production of all goods."b. "Certain talented people have a comparativeadvantage in everything they do."c. ''U a certain trade is good for one person, it can'tbe good for the other one.''d. ''U a certain trade is good for one person, it isa lways good for the other o ne.''c . "U trade is good for a country, it must be goodfor everyone in the country.''
US and South Korea reached formal agreement on a plan to lift S. Korea’s long ban on US beef exports. What type of policy was S. Korea’s banning of US beef and why (other than fear of contaminated beef – mad cow disease) did S. Korea do this? Use offer-curve analysis to discuss the effects of this policy change. How does your answer change with your assumption as to whether S. Korea is a large or small country?
Consider a small country imposing a tariff of $2/unit in imported corn (Policy A). Suppose the country was importing 300 units and this policy resulted in a decline of imports to 250 units. a. Draw the XS and MD before and after the policy is imposed. Label the level of imports. b. Suppose the government decides to double the tariffs and as a result the imports decrease to 200 units (Policy B). Show this on your graph and label the new level of imports. c. Suppose the government adjusts the policy so that there is a tariff of $2/unit is imposed up to a quota of 100 units and then the tariff rate doubles to $4/unit for any imports above that level (Policy C). Show this on your graph and label the new level of imports. d. Under which policy are imports the highest? e. Under which policy is government revenue the highest? f. Under which policy is domestic price the highest? g. Under which policy is world price the highest? h. Can you think of reasons why Policy C may be preferable to a…